eBay CEO: We're at an 'inflection point' in commerce

SAN FRANCISCO--We will see more change in how consumers shop and pay in the next three years than what we've seen in the last fifteen, according to eBay's CEO and president John Donahoe.

John Donahoe
eBay

"The lines between online and offline are blurring," Donahoe asserted. "What's that doing is expanding the opportunity for innovation."

eBay is trying to meet the demands of that opportunity with its new X.commerce open platform, an ecosystem made up of the online auction site and its subsidiaries. X.commerce is intended to bring together the full suite of commerce tools and services so that merchants and developers can build the programs the need to make mobile commerce a reality.

Today, almost half of all retail transactions involve a consumer accessing the web at some point in the shopping process, whether it be researching the product, looking for store locations, or making the final purchase, Donahoe said.

"It's a $10 trillion opportunity," Donahoe said. "The consumer is in charge. Consumers now feel like they have a mall in their pockets."

Naveed Anwar, head of community for X.commerce, argued that consumers now retain this control because they have access to best prices, inventory, coupons, and more right at their finger tips thanks to smartphones and tablets.

"In order to win in today's retail, it's not about who can invest the most amount of money and who can have the best location," Anwar argued, "It's about keeping up with the pace of innovation and getting ahead."

This is having profound implications for merchants all over the world. No longer is it enough to have stores, a website and a catalog. Websites are driving foot-traffic and demand, and merchants are scrambling to figure out how to deal with daily deals and mobile trends.

But those retailers don't know who their customers are, and the key to getting ahead, Donahoe posited, is figuring that out.

"They need that data to compete in this new world," Donahoe explained. "We want to enable customers to buy anything, anywhere, any how."

Donahoe said the strategy is to do just that through the three core companies (eBay, PayPal, and GSI), but that's not where the front-end innovation is.

Rather, it's the focus of the conference this week: the X.commerce platform, touted as the "world's first" open commerce operating system.

"I know that no one single company can provide all the solutions," Donahoe acknowledged, adding that "retail is a huge complex market," and that the only way to achieve these goals is to work directly with merchants worldwide -- not competing with them.

The X.commerce team will build the full suite of commerce tools, which eBay has accomplished thus far primarily through several acquisitions in the last year. Some of those purchases included Milo, Where, Magento, Zong, and RedLaser.

As of right now, there are more than 850,000 developers participating in the X.commerce ecosystem.

"Shopping has evolved in ways that weren't even possible years ago," said Anwar, "Technology is at the middle of this."